In Focus: The latest trends in sports sponsorship

By Josh McLeod, Lecturer in BA (Hons) International Football Business at UCFB Wembley

The market for sports sponsorship has grown exponentially over the last decade. At present, global sports sponsorship has an estimated value of £35bn, and this is expected to exceed £36bn by 2020. Consequently, sponsorship has become a critical revenue stream to exploit for modern sports businesses if they are to gain competitive advantage.

It is testament to the importance of sponsorship that sports businesses are constantly striving to offer innovative new ways of providing exposure and value to brands. This approach has led to an ever-changing market, and being responsive to the latest developments has become key to commercial success.

We have observed some notable trends across this fast-moving industry that we expect to continue in the coming years. These developments will have important implications for the very nature of sports sponsorship, and are thus crucial to consider for all interested stakeholders. In no particular order, we will now look at each trend.

Going east

There has been a marked increase in investment from Asian companies in sports sponsorship. Nowhere has this been clearer than at major sporting events. Notably, seven of the 12 major partners of the 2018 FIFA World Cup were from Asia. This represents a significant movement from previous tournaments where the majority of sponsors were North American or European. Furthermore, with Japan chosen to host the forthcoming Rugby World Cup and Olympic Games in 2019 and 2020 respectively, the ascendency of Asian companies in the sports sponsorship market is only set to continue.

It is not just the major sporting events, however, that are experiencing a growing Asian presence. Asian companies are now ever-present on English Premier League football jerseys. For the 2018/19 season, eight of the 20 main-shirt sponsors will be head-quartered in Asia – a rise from only one sponsor in the 2003/04 season. This shift towards Asia is symptomatic of the region’s growing economic power (relative to the west), and will continue to manifest itself in the coming years.

Technology

Technology is likely to be the most influential factor in the development of sports sponsorship. By adopting and using the latest technologies, both parties in a commercial partnership (the sports club and the brand) have a wealth of new options available to them to maximise their return on investment. For instance, social media, with its unending ability to offer international exposure, is now a staple tool used by sports clubs.

Although the concept of social media is not new, the application of social platforms has undergone a radical shift in recent years. Channels such as Snapchat and Instagram are proving adept at creating a more integrated and immersive fan experience. This is where the real value exists for brands, as their potential to interact with consumers now transcends billboard or front-of-shirt sponsorship. Now, connected stadiums and screen-obsessed societies allow sponsors to engage with fans before, during and after matches.

The introduction of virtual reality is also close, and this technology is where some of the most innovative sponsorship strategies will be deployed. Companies will have the opportunity to (literally) bring their brand to life in virtual stadiums while fans watch their favourite team live from the comfort of their own home.

Industry crossovers

In 2016, Manchester United took a novel approach to announcing Paul Pogba’s transfer to the club. Pogba, alongside English rapper Stormzy, collaborated on a music video that revealed the news. To maximise impact, the video was released before established media outlets had the story, and Adidas were placed at the centre of it. This clever marketing strategy, which involves superstars crossing over to new settings, is symbolic of a modern and interconnected world.

For brands involved in sport sponsorship, industry crossovers are appealing because they facilitate exposure in new and diverse contexts. Large sports brands such as Adidas – particularly with its ‘Here to Create’ campaign – appear to be the first-movers in this area. However, there is scope for smaller brands to utilise this powerful approach, and we can expect to see more inter-industry collaborations in the near future.